How To Avoid This BIG Retirement Mistake

[@situated4]

Depends on how you view things. I have absolutely no problem with the pictured decreasing yield curve after 30 - 40 years in retirement. I painfully accumulated the nest egg over decades of discipline and extreme sacrifice, and we hopefully plan to spend down every. single. dime.

[@maximuscomfort]

A fair plan and kudos to your sacrifices. I'm planning to live large while young and healthy and leave skint, sick and covered in lime.

[@casmithc2]

Running out of MONEY when I am too old to work is a big concern of Mine!!

[@Dr.irenebuenavistamolina]

very helpful, thank you! planning to retire in 20 years, but I can start preparing now.

[@gizmobowen]

Thanks for the video Dave. It's all helpful advice. I still have a question though. Where do I find out why a "successful" financial plan ends up with at least what you started with? If I have a million dollars, when I retire and I die with a million dollars, that sounds like a failure to me. I know it's not the correct phrase, but it reminds me of the economic phrase, "opportunity costs." It's costing me a lot of money by not utilizing my money to the fullest. I agree that running out of money is a serious goal. But dying with a ton of money (unless you have a legacy goal, which is fine), seems like an unnecessary target that really limits how much enjoyment you can get out of your money and that's what I want my money to do for me.

[@mikesurel5040]

Love the examples. Keep 'em coming. We already have and adviser. It is eye opening to tinker with the numbers for monthly expenses, rate of return and savings rate and see what small adjustments can do over time

[@defariase]

Awesome video (as always)!! Thank you so much Dave. You are a ROCKSTAR!!!

[@stevenharris6626]

I just started watching your videos and I find them very helpful! I have thought about most of your plans and at least it seems I'm on the correct course. Unfortunately I seem to be telling my broker what to do, and it might be time to change brokers to a CFP who specialize in people who are very close to retirement. Great videos!!

[@accudave]

I have never seen anyone address this weird pension option that I have. In addition to the normal "Single Life", "Joint and Survivor", or "Certain and Life", I have this other two options for "Social Security Level Income Age SS NRA" or "Social Security Level Income Age 62". In these options they boost your pension quite a bit up for the first few years and then drop it down when you start collecting Soc.Sec.

[@jpturner171]

Great video Dave! I’m happy to say we are more prepared now than ever, do in part to our “deep-dive” researching, scenario modeling AND YOUR videos! Semper Fi👍🏽🇺🇸❤️

[@jeffb.2469]

Examples are great, and I think we all learn better with the use of visual aids.

[@EricMcDowellegm]

Great insights as always. Thanks, Dave!

[@cjimcook]

I like the video and look forward to coverage of the other two of three retirement slices if you haven't done them already (I may have missed them).

[@Erginartesia]

This relates to pulling $ to payoff a mortgage with 20 years left… let’s call that $150k. In a $1mil portfolio. Let’s say you pull the $ out of a deferred account. THEN you keep your expenses the same as before you paid off the mortage, and you now start putting that mortgage payment BACK into your portfolio in a brokerage. How would that look over 20 years (the length of the original mortgage)?

[@mitchbandalan9450]

You can use New Retirement calculator and use the scenario planning feature and you would know.

[@micheleyoungblood]

I would not pull that much money out of a deferred account to pay off a mortgage. You have to pay income taxes on your deferred account. That amount will then increase your taxes for the year putting you into a totally different tax bracket and you will be paying a lot more income taxes then is worth paying off the mortgage for. Then your part b Medicare premium could go up because now you hit the point where you're making more money than the lower payment. Then your Medicare part b premium could be adjusted up because you hit a point of income that put you up into a much higher tax bracket lifting that Medicare part b premium up for the next two years until you can prove your income is actually lower. I would only pay off my mortgage with tax-free money. Money in a brokerage account you already paid taxes on or a Roth IRA. But a deferred account is the worst place to take the money from in a lump sum like that. Then again I wouldn't want to take all the money out of a Roth either because during retirement you need to be able to take money from all the various account so you not lifting yourself into too high a tax bracket. All the money in 401K Roth and traditional IRA are going to need to be taken out at age 73 which will increase taxes if you have substantial accounts You are talking about taking pre tax dollars taken out of a deferred account to pay off a mortgage. Then pay a lot of tax on that money ( total bad planning) and then use after tax dollars in the same amount of the mortgage payment to put away into a brokerage after tax account. I see a lot of lost dollars that were unnecessary to be lost on taxes. You need to understand you tax situation and where your taxes increase and which brackets they increase to and take smaller amounts out each year

[@angiew4544]

We're having a dry run now with my husband receiving disability. Still have a house payment but selling and buying in a cheaper state would eliminate that making it possible for him to draw his pension which is more than disability. We are actually saving quite a bit on him not commuting to work every day .

[@lindad6223]

Be sure to double check the taxes on the pension vs. disability. Some disability income is not taxable income. Best of luck!

[@joycef8443]

How would selling and buying in another share affect drawing his pension?

[@mitchbandalan9450]

I think it would be interesting to see a real life examples of retirement expenses.

[@jaynelson8304]

With inflation ramping up again, I would like to see the potential damage done to a portfolio over 20 - 30 years

[@jhors7777]

Thank you for posting this helpful video. I enjoy and appreciate your channel.

[@randolphh8005]

Agree that good budgeting, with careful review, especially in the first couple years is very helpful. Planning for needed expenses, and then understanding discretionary wants makes things work a lot better. Not sure I agree with just dumping money in the checking account monthly. That form of “budgeting” is commonly used while working, when you set spending by money available and spend all available. In retirement, that isn’t the goal. Instead the goal is to understand your spending and manage it better, and stay within the budget. Many expenses that we now have are episodic, like travel. We budget $2000 per month for travel, but we don’t spend that every month. We take the $24k and spread it over several vacations, in different months. Same with insurance, taxes, and planned one time purchases. So we have a “monthly budget” but don’t spend that amount every month. We are pretty strict about our annual budget. Also since we have quite a bit of discretionary spending, it is much easier to tighten the belt if running over.

[@johncorpora3573]

How do you feel if you have a pension that covers the mortgage?

[@garyxyz4400]

Retirement is a gamble.

[@vinyl1Earthlink]

As a retiree, I give myself some money to live on, and invest the rest of my income. This insures that my assets will go up, not down. Just remember, withdrawals from IRAs and 401Ks are not income - you are taking money from one pocket, paying taxes, and putting it in another pocket. This does not increase your assets, it reduces them.

[@peacefrog0521]

8% is certainly not insignificant, not as a percentage, and not as a sheer amount. In the flight deviation analogy, an 8% course deviation is equivalent to approximately 28 degrees off course / off target - not one degree. I didn’t track how far off that takes someone flying from San Francisco, but it’s obviously a heckuva lot more than 42 miles. That said I do like your message and methods , and especially relate to your statement about Needs and Wants. You called this the Income Plan, but really this turned out to be the Spending Plan. I’m looking forward to the next in the series talking about taxes.

[@nfrancis11]

Slightly off topic, how come retirement calculators don't have an area for indexed universal life policies? It's a great vehicle when done right and I have no way of implementing it into my retirement plan to simulate when I retire.

[@kwfannin]

Love models!

[@kennethwers]

What about the spending plan. Low taxes, No payments?, no SS deduction, No more saving for retirement, equals less income needs.